Why Djibouti is against Somaliland, Berbera port Development

In 2006, DP World and the Djiboutian Government established a joint venture, with the signing of a 30-years concession to operate the Doraleh Container Terminal.

That successful partnership led to the joint venture investment in the newly developed Doraleh container terminal.

Doraleh Container Terminal (DCT) is the most technologically advanced container terminal in the African continent. Just 11 kms south of the International Autonomous Port of Djibouti, DCT enjoys the same strategic location at the crossroad of the main shipping lanes connecting Asia, Africa and Europe. but now Doraleh will face challenges from Berbera port which will be a regional hub for

But now Doraleh will faces challenges from Berbera port which will be a regional hub for Africa, if Somaliland and DP world Agreement is successfully implemented.

DP World, which has a portfolio of about 65 terminals around the world, will cancel the 30-year concession to operate the Doraleh terminal in Djibouti. DP world’s cancellation is not a big issue according to Djibouti government but

DP world’s cancellation is not a big issue according to Djibouti government but that DP World invest in Berbera Port, which is located on the same strategic location place to Doraleh port is a most worst case scenario that Djibouti had ever heard.

Doraleh was a main gateway for oil imports into East Africa, as well as a transshipment point for goods moving between Asia, Africa and Europe. With an annual handling capacity of 1.2 million twenty-foot equivalent units, the terminal is the largest in East Africa now. However, Berbera Port will be larger than Doraleh, after DP World invests to $442 Million.

DP World, which already has five operations in Africa, including in Egypt, Djibouti and Senegal will continue its operation in Africa. Djibouti will be taken out of the list. The Somaliland Republic will replace the Djibouti government.

If Djibouti loses the DP World operations in Doraleh, it would be the second country which lies along the Red Sea Coast region that DP world cancels. In September 2012, it announced it had sold its 50 per cent stake in the company managing the container terminal of the port of Aden in Yemen during unrest stage.

On the other hand, DP world is a major contributor to Djibouti’s economy according to DP World’s statement “We have invested significantly in Djibouti over those years and have been a major contributor to its economy and to its community.”

Ethiopia, which was a customer to Doraleh port, welcomed the historic agreement between Somaliland and DP World, but never realistically expected Djibouti to do the same because of the market competition between Djibouti port and Berbera Port.

Now the reality is revealed, is it explains why Djibouti is unhappy with the agreement between Somaliland and DP world which based on an extensive investment on Berbera port.

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